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Minnesota Battle Over Israeli Bonds

A legal fight is underway in Minnesota over the state’s investment in Israeli bonds that are used to support settlements and other Israeli actions in the West Bank deemed illegal under international law. Sylvia Schwarz, a plaintiff in the lawsuit, explains why she’s demanding the state’s divestiture.

“I do not think this is a radical call,” says Ronnie Barkan, of Boycott From Within (BFW), an Israeli human rights group that advocates boycott, divestment and sanctions (BDS) of Israel until it complies with international law and human rights consensus.

“Simply by investing in the State of Israel, Minnesota inadvertently supports the criminal policies of the State [of Israel], which are detrimental to both the Palestinians and the Israelis.”

Boycott From Within is one of three organizations and 24 individuals listed as plaintiffs in a lawsuit against the State of Minnesota for illegally investing in Israel bonds, bonds which are used to fund projects such as the Separation Wall (ruled illegal in 2004 by the International Court of Justice) and illegal settlement construction and infrastructure (a violation of Article 49 of the Fourth Geneva Convention.

Minnesota is one of more than 75 state and municipalities which holds Israel bonds. Most of these bonds were purchased in the last decade, when the Development Corporation of Israel made a major sales push.

The Minnesota State Board of Investment (SBI) is a state agency which is charged with investing state retirement and pension funds. The SBI members are Gov. Mark Dayton, State Auditor Rebecca Otto, State Attorney General Lori Swanson and Secretary of State Mark Ritchie.

Boycott From Within members are all Israeli citizens living in Israel. They have publicly and enthusiastically endorsed the 2005 Palestinian civil society call for BDS against Israel to force the state of Israel to comply with international law. For this act of free speech (recognized under the International Covenant on Civil and Political Rights), they face lawsuits and civil penalties under Israel’s recent “anti-boycott law.”

Minnesota Break the Bonds Campaign (MN BBC), which also endorses the Palestinian call for BDS, was formed in 2006 in response to that request for international solidarity. Made up of a diverse group of people from varying occupations, histories of activism, and levels of involvement with the Palestine/Israel issue, members of MN BBC all agreed that providing accurate information to the public was a major obstacle in ending Israel’s colonialism and oppression of the Palestinians.

In every respect, the news media, schools and universities, and even culture and entertainment have, until recently, ignored the Palestinian side of the issue. Palestinians, when portrayed in the media at all, have been demonized, equated with terrorists, and dehumanized.

Few stories of Israeli violence against Palestinians are reported in the media, while reports of Palestinian violence against Israelis are repeated over and over again, giving the impression that the latter occur more often than the former. (The UN Office of Coordination of Humanitarian Affairs website shows accurate statistics. See a report comparing incidents of violence versus the number of reports in the mainstream media.)

Three Main Goals

MN BBC has three main goals. The first is to persuade Minnesota to divest from its Israel bonds investments. The second goal of MN BBC is to educate every Minnesotan about the state’s involvement in the human rights abuses in Palestine. Since every Minnesota taxpayer pays for the SBI’s investments, every Minnesotan is actively involved in the international law violations committed by the Israeli government.

The third goal is to serve as a model for organizations in other states and municipalities that are attempting to divest of Israel bonds. MN BBC is one of the first organizations that have targeted these investments and a vast amount of knowledge and experience has been accumulated within the group.

In early 2011 it became clear to the legal minds in MN BBC that the State Board of Investment had invested in Israel government bonds in violation of Minnesota statutes, which allow investment in government securities of only one foreign country: Canada, and then only with certain restrictions.

Although this seems like an unexciting legal technicality, it is actually a stunning discovery. From available records it appears that the SBI broke the Minnesota law for Israel alone, in order to show solidarity with Israel and to single it out for special favored treatment.

Regardless of the human rights and international law violations that the money buys, regardless of the international community’s disapproval of the financing of these crimes, and regardless of the prohibition under Minnesota’s own statutes, the SBI showed its favoritism towards Israel by its zeal to invest Minnesota taxpayer funds in a clearly illegal enterprise.

Minnesota has trade relationships and commercial partnerships with many other countries, but in no case (until this lawsuit was filed) did the SBI break Minnesota law to invest in non-Canadian foreign government bonds, except for Israel bonds.

Israel defenders often ask why we single out Israel for condemnation. Other countries have equally poor human rights records. Why not decry China’s or Iran’s abuses? But for which other country are our own state’s laws broken to make Minnesota taxpayers complicit in these human rights violations?

We repeatedly demanded that the State Board of Investment divest from Israel bonds on moral and legal grounds but it refused and even purchased more bonds. Because the law prohibits this type of foreign government investment, we filed a lawsuit. The lawsuit has three counts.

The first count states that the investments are illegal according to Minnesota statutes. The second count states that by investing in activities which are clearly illegal according to international law, the State Board of Investment is acting contrary to the U.S. and Minnesota Constitutions which state that international treaties and conventions signed and ratified by the United States, like the Geneva Conventions, are laws of the land.

The third count states that these investments expose the SBI and the Minnesota taxpayers and pensioners, who would foot the bill, to lawsuits brought against them by individuals who have been harmed by Israeli policies under the Federal Alien Tort Statute. In other words, the investments are supplying material support for oppression and Minnesota could be liable for these damages.

Money’s Use

It is important to understand how these investments are used. The Bil’in Popular Committee Against the Wall and Settlements, another plaintiff on the lawsuit, is a direct victim of investments made in Israel Bonds.

Since 2004 the Bil’in Popular Committee, which is comprised of villagers from the West Bank town of Bil’in, has been holding weekly non-violent demonstrations to protest the illegal annexation of the village land by Israel for illegal settlements and an extension of the separation wall.

The annexations began in the early 1980s and now more than 60 percent of Bil’in’s arable land and several water wells have been confiscated to make way for the wall and Israeli settlements. Although the protests are non-violent, they have been met with extreme violence from the Israeli Defense Forces.

Several demonstrators have been killed (including Bassem Abu Rahmah who died when Israelis fired a tear gas canister directly at his chest, and his sister, Jawaher, who died from inhalation of tear gas). Many injuries have resulted from IDF violent responses to these non-violent protests, and many people, including children, have been arrested and held without charge or trial in “administrative detention.”

The confiscation of Palestinian land and resources and the movement of Israeli civilians into occupied territory are clear violations of international law. This is undisputed and acknowledged by the U.S. State Department and when U.S. loan guarantees were given to Israel between 1992 and 1997 to settle immigrants from the Soviet Union, they were expressly forbidden to be used to fund settlement activity in the West Bank.

When Israel violated this provision, the loan guarantees were cancelled. In other words, the U.S. acknowledges that Israel violates international law.

The Geneva Conventions were signed and ratified by the United States. Under the Supremacy Clause, Article 6 of the U.S. Constitution, Minnesota, as well as every other State, is obligated to uphold international treaties ratified by the federal government.

Since the money invested in Israel bonds finances projects which are in violation of a signed and ratified convention, the investments violate both the state’s and the U.S. Constitution. Again, Israel is favored for special treatment. Minnesota would violate a provision of the U.S. Constitution for no other country.

The Fourth Geneva Convention is not the only international law which Israel violates. Israel was admitted to the UN by Resolution 273, which called for the implementation of Resolution 194, including the return of (or compensation to) the 750,000 refugees who had been ethnically cleansed from their homes within Israel between 1947 and 1949.

The call for the return of the refugees has been reaffirmed many times within the U.N. and by human rights organizations. The personal right to return to one’s home is enshrined in the Universal Declaration of Human Rights. Yet Israel has never allowed any of the expelled refugees to return. This is an enormous unhealed personal and national wound for Palestinians which is expressly written into the Israeli system of law (Israel has no constitution) in order to create and maintain a Jewish majority.

A Palestinian Refugee

One of the 750,000 refugees from 1948, and another plaintiff on the MN BBC lawsuit, is my husband, Nadim Shamat. After growing up in Beirut, Lebanon, and attending the American University of Beirut, he immigrated to the United States, where I met him. As a former employee of a state agency, he is a recipient of pension funds managed by the State Board of Investment.

When Nadim was born, in 1945, my maternal grandmother was being liberated from Bergen Belsen, the Nazi concentration camp, after two horrific years of slave labor and starvation. She and my mother, the only survivors in her family, spent the next few years trying to salvage what was left of their former lives and finally made their way to British Columbia, where my parents met.

Understanding the personal and family trauma through which my family lived makes me very aware of the pain of unhealed traumas.

Because of Israel’s racist laws granting special privileges to Jews and denying those privileges to non-Jews, I have the “right” to “return” to Israel any time I want (even though my background is European and the most recent of my ancestors to live there were there at least 2,000 years ago) and take citizenship there.

I can purchase property managed by the Jewish National Fund and held for Jews only. I can live in a Jewish-only community within Israel, the West Bank, or the Golan Heights. But my husband, who was born in Jaffa, who left involuntarily, who lost all his possessions, and the community that would have supported him as he grew up, is not allowed to return to his actual homeland. Before funding Israel’s racist and colonialist policies, Americans should consider the fundamental unfairness of this situation.

Each of the 27 plaintiffs on the lawsuit against the SBI gives a unique reason for the state to divest from Israel bonds (see some of the stories here.) The judge, however, has only to rule on one count in our favor: the mundane legal technicality that foreign government securities are illegal investments according to Minnesota law, and order the SBI to divest from its Israel bonds.

It appears to be such a clear legal case, and if it were any other country, it would never have required a lawsuit. But this is Israel, the country to which the U.S. gives military aid of more than $3 billion per year, more than any other country in the world.

This is Israel, whose international law violations the U.S. upholds and protects in the UN Security Council. This is Israel, to which the I.R.S. grants tax-exempt charitable status to finance ethnic cleansing through the Jewish National Fund . This is Israel, whose prime minister received overwhelming applause and 29 standing ovations in Congress that were, in the words of Thomas Friedman, “bought and paid for by the Israel lobby.”

So this lawsuit, though clear and solid in its legal foundation, might not win in court. Judges are elected in Minnesota. They are subject to the same types of pressures as other elected officials. But we don’t believe that a loss in court is necessarily a setback. We have made enormous strides in educating people around the state and the country about Israel and Palestine.

Our membership is growing and we have even had a presence in the mainstream media. We believe our goals of reaching out across the state and the country and bringing forth the Palestinian side of the story can only be furthered by this effort. We are committed to justice, freedom, and equal rights for all and we believe our efforts will bring Palestinians closer to this goal.

Sylvia Schwarz is a member of the Core Team of Minnesota Break the Bonds Campaign and a plaintiff on the lawsuit against the State. She is married with two children and works as an engineer in St. Paul, Minnesota.

From the Archives

By Yazan al-Saadi | Al-Akhbar | September 29, 2014

Much of the grim and murky circumstances of the Zionist ethnic cleansing of Palestinians in the late 1940s have gradually been exposed over time. One aspect – rarely researched or deeply discussed – is the internment of thousands of Palestinian civilians within at least 22 Zionist-run concentration and labor camps that existed from 1948 to 1955. Now more is known about the contours of this historical crime, due to the comprehensive research by renowned Palestinian historian Salman Abu Sitta and founding member of the Palestinian resource center BADIL Terry Rempel.

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